By Steve Williamson, Consultant Cancer Pharmacist, National CDF Panel Member and Module Leader.

My Module, Cancer Drugs and Technologies looks at pricing and market access to cancer medicines amongst other things.  This is an area that is never far from the news headlines. Last week saw the announcement of changes to the Cancer Drug Fund (CDF), which provides funding for high cost cancer medicines for patients in England.  The fund which was £200million has been increased to £280million for this year and next… just as well, as the fund overspent last year by nearly £50Million.  It also highlighted some important changes to the ways the CDF will work, more of that later.

The CDF was seen as the great solution to accessing high cost cancer medicines, extra money specifically to fund drugs too expensive for the UK’s  Health Technology Assessment body, NICE.  It’s fair to say that the CDF has worked and improved access and its first three years and funded many new treatments that get turned down by NICE.  But one of the great weakness of the CDF is it hasn’t taken account of cost, until now.  You can speculate that this has led to manufacturers being less concerned at keeping their UK pricing down as the CDF will fund it anyway.  Look at the row between Roche and the NHS over its new breast cancer drug, Kadcyla.  See the coverage on the BBC http://www.bbc.co.uk/news/health-28688311.  In summary, NICE have said no and patients are disappointed, NICE were not able to agree an acceptable discount with Roche, but the drug is available at full price on the CDF.

NICE said they were unable to say yes as the company were not working with them on pricing. Their chief executive Sir Andrew Dillon said: “We are really disappointed that Roche were not able to demonstrate more flexibility…The company is well aware that we could not have recommended Kadcyla at the price it proposed.” This is really strong language for NICE who usually do not comment when they say no.  Roche then went on the counter offensive with Roche Senior figures quoted: “We’re very disappointed with this decision and, frankly, not just for patients”, “NICE’s rejection of Kadcyla demonstrates quite simply that their current system is broken, not fit for purpose”, strong words.

Now it just happens that this row was between NICE and Roche, but in truth given the global pricing trends it could have been any manufacturer with a new expensive cancer drug.

But what are the facts behind the headlines?  Kadcyla, is new version of an existing drug trastuzumab (herceptin) that offers benefit after patients disease has progressed on trastuzumab.  It is the original trastuzumab molecule a biological targeted agent combined with a traditional cytotoxic agent, which is then ‘delivered’ directly to the tumour, clever stuff.

But Kadcyla is not a curative drug, its used (for the moment) in patients with advanced breast cancer.  The trials show it extends median overall survival by 6 months, that is patients will on average live 6 months longer.  Its costs £90,000 for a 14.5 months course of treatment, equivalent to £75,000 a year.  This compares to trastuzumab at £21,000 per year.  So why is it so much more expensive than the original molecule?  The Pharmaceutical industry often quotes drugs development costs to justify high prices, but have development costs increased so much in 10 years?.  Development costs are often driven by need to test many molecules that don’t prove to be successful in search for a winner.  In this case you could argue that there were none of these costs as the drug combined existing drugs. Only Roche have answers to this. My view is that it is overpriced and the high price is driven by recent high prices in other cancer drugs, it seems that as soon as the next ’most expensive’ cancer drug price is accepted, this resets the pricing benchmark and prices just keep spiralling higher.

So coming back to the CDF (still with me?) you could speculate that manufacturers will be less keen to try and seek agreement on discount price with NICE if the can have their drug funded in England by the Cancer Drug Fund.  The NICE rejection has not hurt Roche’s sales in England as the CDF continues to pay the full price, reaching agreement with NICE could be seen as counter intuitive for Roche as soon as NICE say yes at a discount the CDF will stop paying full price.   The CDF panel has recognised this and part of the changes announced recently mean that they will look more closely at prices of drugs it has approved and will be trying to support NICE in its efforts to encourage more realistic pricing for the UK.  There is going to be some interesting discussion at the next CDF panel meeting, that’s for sure!

All opinions expressed in our Blog are those of the author and not of Newcastle University.